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ISLAMABAD: After mutual consent of the finance and petroleum managers, the summary of reduction in gas prices by 18.7 percent to 51.7 percent for domestic consumers and Petroleum, Oil and Lubricants (POL) prices up to Rs 6.44 per litre has been approved for the first half of July 2012.

Sources in the Ministry of Petroleum and Natural Resources informed that the proposed cut for gas and POL prices by the Oil and Gas Regulatory Authority (OGRA) has been approved, however formal notification will be issued today (Saturday) and effective from July 1, 2012.

After approved cut in gas prices for domestic consumers, using up to 100 cubic metres and 300 cubic metres per month would be reduced by 18.7 percent from Rs 122.95 per million British thermal unit (MMBTU) to Rs 100 per MMBTU and Rs 245.89 per MMBTU to Rs 200 per MMBTU, respectively.

The domestic consumers consuming over 300 to 500 cubic metres per month would enjoy cut in gas prices by 51.7 percent from existing Rs 1,035.34 per MMBTU to Rs 500 per MMBTU, however gas price of bulk domestic consumers using over 500 cubic metres per month would be hiked by 0.8 percent from the existing Rs 496.21 per MMBTU to Rs 500 per MMBTU.

The approval has been sought from the prime minister to cut the price of compressed natural gas (CNG) in region-1 consisting of Khyber Pakhtunkhwa, Balochistan and Potohar region by 7.7 percent from the existing Rs 822.53 to Rs 759.55 including Rs 141 per MMBTU cess and 8.3 percent for region-2 consisting of Sindh and Punjab from Rs 760.53 to Rs 697.55, including Rs 79 per MMBTU cess.

However, the Ministry of Petroleum and Natural Resources approved increase in gas prices for the industry including captive power, Water and Power Development Authority, Karachi Electric Supply Company, GENCOs and Independent Power Plants (IPPs) by 10.3 percent that would enhance cost of doing business for the industry and raise tariff for power consumers. However, no change in price has been proposed for commercial consumer; gas to be used as feedstock for fertilizer old and new plants.

The Ministry of Petroleum is also seeking hike in gas prices by 10.3 percent for the industry including captive and power sector by raising rate of Gas Infrastructure Development Cess (GIDC) to Rs 100 per MMBTU.

At present, the industry including captive power is paying Rs 13 per MMBTU cess, WAPDA, KESC and GENCOs Rs 27 per MMBTU cess and IPPs Rs 70 per MMBTU cess. The rate of power, industry, captive power and IPPs has been proposed to be revised upward from the existing Rs 507.86 per MMBTU cess to Rs 560 per MMBTU, including Rs 100 per MMBTU cess.

Petroleum managers also approved reduction of Rs 5.02 per litre in existing price of petrol, high octane (HOBC) Rs 6.44 per litre, high speed diesel (HSD) Rs 2.48 per litre, light diesel oil (LDO) Rs 2.86 per litre and kerosene oil has been recommended to be slashed by Rs 2.54 per litre in local market.

The new prices of POL products are as follows; petrol will come down to Rs 84.49 per litre from existing Rs 89.51 per litre, HOBC to Rs 106.88 per litre from Rs 113.32 per litre, HSD to Rs 97.21 per litre from Rs 99.69 per litre, LDO to Rs 83.71 per litre from the existing Rs 86.57 per litre and kerosene oil to Rs 86.25 per litre from Rs 88.79 per litre.

The decision and notification on revised oil and gas prices would be announced today (Saturday).

After adopting mechanism for determination of POL prices after 15 days witnessed accumulated relief of Rs 18.23 per litre during the ongoing month of June 2012.